• S&P 500 Futures struggle for clear direction after two-day downtrend.
  • Traders await fresh clues on full markets’ return, Fed and stimulus.
  • US ISM Manufacturing PMI becomes the day’s key data.

S&P Futures seek guidance as sellers take a breather around 4,200 after two consecutive days of dominance. Fears of strong inflation in the US directing the Fed towards tapering weighed on the market sentiment previously. However, hopes of further stimulus seem to probe the bears of late.

US President Joe Biden stretches the $1.7 trillion infrastructure spending plan discussions to June even as Republicans previously lashed out his tax-hike plans. Also on the market-positive side could be the $6.0 trillion multi-year budget, as well as an upward revision to the US GDP forecasts for the FY 2021-22.

It’s worth noting that the reduction in the coronavirus (COVID-19) woes in Asia and a steady vaccination drive in the West add to the market’s optimism.

On the data front, China’s Caixin Manufacturing PMI followed the footsteps of the official NBS Manufacturing PMI while staying near to the previous level of 51.9, at 52.00 in May.

Amid these plays, US Treasury yields jump three basis points (bps) to 1.62% but fail to put a safe-haven bid under the US dollar by the press time.

Moving on, investors will keep their eyes on the US ISM Manufacturing PMI figures, expected to repeat 60.7 figures, amid hopes to find early signals of Friday’s Nonfarm Payrolls (NFP) as well as confirming the recent reflation fears.

Read: ISM Manufacturing PMI Preview: NFP Hint? Inflation component to steal the show, rock the dollar

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